Market indicators, socio-economic factors, technological advancement, and policies show prospects in Tourism, ICT, Agriculture, and Education. In this article we explore four booming sectors of Nepal to look out for this year. Here are some best business

 

In the past few years, Nepal has seen something it had not seen for a while: political stability. Alongside political transformation that came from structural change, we have also witnessed proactive measures taken by the government to bring about economic transformation in the country. So, if you are wondering what would be some lucrative businesses to invest in stay with us because here is our take on best businesses to invest in Nepal!

Tourism:

You might have heard about Visit Nepal 2020. 2020 was the year of tourism for Nepal, with the country expecting an influx of about two million tourists it was a perfect opportunity for us to capitalize in tourism sector. But, due to the spread of Corona virus all over the world, 2020 was hard year for all of us. However, now we know that if full precaution is taken, we can prevent the spread of COVID-19. Tourism sector will definitely get better. In less than two years Kathmandu has seen Marriot, Vivanta, and Oyo hotels rise from ground zero and they all indicate one thing- tourism sector of Nepal is at its boom. At the same time Government of Nepal is playing a proactive role to encourage sports tourism and MICE tourism by providing incentives through cash grants to traders in these sectors.

Depending on your investment capital, risk appetite and expertise there are several types of businesses that you could set up to reap benefit of encouraging tourism prospects. You can be a traditionalist- set up an enterprise in food or hospitality sector or become a sustainable travel/ trekking or experience guide. You can also be a savvy entrepreneur -revamp your house as an Airbnb, become an online content creator that caters to tourists, and a freelancing videographer/ photographer. You can do it all!

Internet, Communication and Technology:

According to Nepal Telecommunication Authority (NTA) MIS report, the rate of internet penetration in Nepal in 2018 was 63% that has grown by 6% from previous 57% in 2017 and the numbers are only improving.  Deeper internet penetration means greater connectivity and wider opportunities to explore investment in areas of e-commerce, communication, and technology.

To dig further, we need to understand our country’s data consumption and connectivity patterns. By looking into the subscription figures of Mobile Broadband Services and Fixed (wired and wireless) Broadband services provided by Nepal Telecom Authority we can conclude that mobile broadband service has the largest broadband subscribers in Nepal. Where, 10,905,724 users are connected to 3g services, only 3,612,875 users are connected to 4G services and 136,573 are connected to CDMA services. Similarly, while Bagmati, Gandaki and Koshi Zones have highest level of internet penetration, Kailali district of Mahakali zone is one of the poorest districts of Nepal with poorest internet penetration. 

Considering this, there are many alternatives that you can explore to invest in ICT sector. You can run an e-commerce business model in cities with highest connectivity that includes: Kathmandu, Bhaktapur, Lalitpur, Pokhara, Biratnagar, Nepalgunj, Bharatpur, Butwal, Dharan and Birgunj.

Furthermore, you can invest in development of internet infrastructure in areas that are deprived of such facilities by investing in ISP and digital payment business. To promote and operate telecommunication services, Government of Nepal permits 80% foreign investment in equity stakes in telecommunication and 100% investment in IT and IT related services.

Agriculture:  

Agriculture is one of the major contributors of nation’s GDP. However, for the past few years we have seen steady decline in sector’s contribution to national output.  But, any threat is an opportunity. Due to Nepal government’s incentives in form of interest rate subsidies and tax rebates there are several investment opportunities available for private sector businesses to benefit from it substantially.

To break it down, you can invest in agricultural extension services, manufacture fertilizers, and produce cash crops like: tea, coffee, ginger, cardamom, and honey. For growth and commercialization of agriculture sector there is a huge market gap in infrastructure including plat quarantine, cold stores, and agriculture training centers. At the same time, not much has been done in agribusiness development that includes aspects of marketing, branding, and grading of agricultural outputs.

Similarly, coffee is one of the highest traded commodities after fuel. Nepal has climate and geography to cultivate self-pollinating Arabica coffee and with global coffee prices increasing investment in production, processing, packaging and branding of coffee shows great prospects. Alongside coffee, tea shows equal export value with increase in demand for organic tea in countries like: Pakistan, Germany, Japan, Gulf and EU nations.

Education: 

Nepal’s youth population comprises 40.3% of country’s total population. Adopting employable skill is one of the basic needs of youths. At the same time, there is a substantial gap in industrial needs and skilled labor available to meet those needs

Businesses can capitalize on this gap by providing most rewarding and least risky educational service that focuses in development of required industry level skills. Investment in Vocational trainings, STEM education, Design thinking are some of the many options available for businesses in education sector to bridge chasm that exists between student’s need for quality education and company’s need for creative, analytical thinking and technical skills.

Shambhavi Singh
Finance student, BBA Honors
Entrepreneurial Ecosystem Builder